In the past few years, medical practices have seen a decline in revenue that is unprecedented. Care providers are working harder to maintain revenue streams and identify revenue leaks in the healthcare industry. Here are the top five reasons why a medical practice’s revenue drops, and solutions to prevent it.
Why Your medical practice is losing money?
Reason 1, Claim Denial Management
Billing claim rejections are a critical part of financial management for medical practices. Up to 10% of all medical claims are rejected annually. 86% of those claims that are denied can be avoided. Track all claims filed and ensure that the administrative staff is aware of how to prevent rejections with correct initial inputs, and how to deal with a rejection if it occurs. It may seem insignificant to have one claim that is idle and unpaid, but it can add up over time.
Reason 2, Too Many no-shows
Total missed appointments cost the health care industry about 150 billion dollars a year. No-shows cost the average provider $200. To avoid revenue leakage, it is important to keep appointments. Be sure to use automated reminders for patients, such as automated calls or texts. Also, have clear policies in place regarding missed appointments.
Reason 3, Inaccurate Medical Coding Practices
Medical billing profits are kept in check by using clean coding when submitting claims. The cost of miscoding elective services, treatment supplies, and bundle services is high. In one study, over 70% of claims were erroneous, costing a family practice $185,000 in a year.
Reason 4 -Lost Productivity
In the healthcare industry, a daily fee-per-service reduction of just one percent can lead to a revenue loss of up to $15 per year. Most practices are unable to see the maximum number of patients due to a lack of productivity. Lack of productivity can be caused by:
- Patients expect providers to provide services that they would not otherwise offer
- Primary care physicians and other primary health care providers spend a lot of time on administrative and paperwork tasks
- Use of inappropriate technologies such as a efficient EHR System or automated telephone system to handle calls
- Overbooking or underbooking of patients
- Too much time spent with patients because of complex services or a lack of understanding their needs
Reason 5, Excessive overtime and overstaffing
Overtime due to understaffing can quickly add up. Remember that when you pay time-and a half per hour worked, it’s more practical to pay a standard rate of an hour for the same length. It may be cheaper to hire someone else if the practice has to retain employees for more than 40 hours per week. Overstaffing is just as expensive. If, for example, all employees work on the same day but no one has a job, then the extra staff is being paid without any value.
Reason 6, Small Thefts and Embezzlement
Theft of small practice supplies can affect revenue, but is often overlooked. This type of theft can add up in a year, whether it’s administrative supplies such as reams or paper, boxes of markers or pens, practice supplies such as gloves, gauze and syringes. The loss of profit from embezzlement can be thousands of dollars. This can be avoided with regular inventory checks and by properly monitoring and vetting employees.
Reason 7, Incorrectly updated fee schedules
The fee schedules must be reviewed and updated regularly to reflect the RBRVS, which is set by the Centers for Medicare & Medicaid Services. A fee set too low could easily reduce revenue for a medical practice. If, for example, the practice charges $10 less than RBRVS per in-office screening this can result in thousands of dollars lost over time.
How to stop revenue leakage in healthcare
1. Improved Collection Methods
Create a collection system that is foolproof. Make sure that your revenue cycle matches the billable hours of service. Cash flow problems can be exacerbated by a claim that is left unpaid or a patient who refuses to pay a bill. Be sure that the practice has a plan in place for collection and billing. Establish clear rules and follow up-to date coding practices for payments from patients.
2. Keep Urgent Care Patients
There are urgent care clinics all over the country. Many patients choose to go to these clinics instead of their regular doctor because they have easier access and lower costs. Focusing on keeping your urgent care patients will help you avoid a revenue loss if more patients visit an urgent care facility. This may require adjusting your practice hours to accommodate patients who need urgent appointments, hiring more staff or adopting a telemedicine program to keep them coming back to the office.
3. Adjust Your Marketing Strategy
If your strategy is not working, it may be time to adjust. Consider:
- You can check the performance of your social media pages or the messages you send to customers.
- Print marketing materials can be distributed in-office, or by mail
- Negative press and patient reviews can affect your online reputation.
- Direct marketing, email newsletters and other strategies
Remember that 3 of 5 patients select providers based on a positive presence online.
4. Consider Monetizing After Hours
Often, when physicians are looking for new ways to earn extra income, they should start by examining their availability. The potential to generate new revenue increases when patients are brought in after normal office hours. Patients prefer to consult their doctor for treatment or advice, rather than relying upon a local emergency department. However, many doctors are not available after a certain hour. After-hours monetization can mean that a practice stays open later during the week, opens half-days on weekends or offers telemedicine appointments at times when it is usually closed.
CureMD What to remember?
Medical practice revenue will always fluctuate. However, there are many factors that can be controlled to improve the outcome. Assessing everything from staffing to medical billing and coding services may be necessary if your practice has revenue leakage. Even something as simple as an old EHR system could make a huge difference to downstream revenue. Are you ready to talk about a fully integrated EHR for your practice? Request a live demonstration with CureMD.